SPECIAL  TAXATION 


FOR  THE  USE  OF  STREETS. 


ARGUMENT  OF 

SAMUEL  jf  ELDER,  Esq. 

IN  REMONSTRANCE. 


BEFORE  THE  COMMITTEE  ON 
STREET  RAILWAYS. 


April  6,  1897. 


6 . X 


COMMITTEE  ON  STREET  RAILWAYS, 
1897. 


Hon.  Richard  W.  Irwin, . of  Hampshire 

Hon.  Clarke  P.  Harding,  . . of  Norfolk. 

Hon.  John  D.  H.  Gauss, . of  Essex. 

Hon.  Joseph  B.  Farley,  ....  of  Franklin,  Hampshire. 

Of  the  Senate. 


Messrs.  George  A.  Brown, 

Eugene  M.  Moriarty, 

Edward  H.  Hoyt, 

Patrick  J.  Kennedy, 

Walker  S.  V.  Cooke, 

Joseph  O.  Neill, 

Daniel  D.  Rourke, 

Otis  V.  Waterman, 

Freeman  O.  Emerson, 

Julius  C.  Anthony, 

William  A.  Josselyn, 

Of  the  House. 


of  Everett, 
of  W orcester. 
of  Bradford, 
of  Holyoke, 
of  Milford, 
of  Fall  River. 

of  Boston, 
of  Wakefield, 
of  Boston, 
of  Adams, 
of  Pembroke. 


<], 

$ 

f 


* 


In  Committee  on  Street  Railways. 

Tuesday,  April  6,  1897. 


CLOSING  ARGUMENT  OF  SAMUEL  J.  ELDER,  ESQ. 
Mr.  Chairman  and  gentlemen  of  the  committee: 

The  questions  that  have  been  asked  of  me  with  regard  to  the 
length  of  time  I  am  going  to  take,  call  to  mind,  if  you  will  par¬ 
don  me  for  a  digression  before  there  is  anything  to  digress 
from,  the  encampment  of  the  Grand  Army  of  the  Republic  that 
was  held  here  in  Boston  some  years  ago.  At  one  of  the  great 
camp-fires  a  large  number  of  speakers  were  introduced.  One 
man  from  the  West,  at  the  very  close  of  the  meeting,  found  him¬ 
self  called  upoD.  It  was  about  midnight  and  most  of  the  com¬ 
rades  had  begun  to  depart  from  the  hall.  He  had  written  his 
speech  out  and  committed  it  to  memory,  and  there  was  no  way 
in  which  he  could  shorten  or  vary  it.  So  he  marched  forward 
to  say  it  just  as  he  had  learned  it  : 

“  Mr.  Commander  and  gentlemen  of  the  Grand  Army  of  the 
Republic,  on  this  great  and  momentous  occasion,  what  shall  I 
speak  about  ?  ” 

Some  one  down  at  the  rear  of  the  hall  yelled  out, “  Speak  about 
a  minute.”  Well,  I  cannot  cut  my  argument  down  to  that  length, 
but  I  went  over  a  good  many  street  railway  matters  last  Thurs¬ 
day,  and  shall  endeavor  not  to  repeat  myself  to  any  great  extent, 
and  thus  shall  be  much  briefer  than  I  then  was. 


v 


Three  Methods  of  Dealing  with  Street  Railways. 

It  has  already  been  said  in  the  course  of  these  hearings — and 
I  am  now  beginning  to  repeat  myself  for  a  moment — that  there 
are  three  ways  in  which  the  State  can  deal  with  street  railways. 
One  of  them  is  to  secure  the  lowest  possible  fares  for  the  public. 
An  illustration  of  this  method  is  Detroit,  where  the  fares,  at 
least  on  one  of  the  lines,  are  very  low  indeed.  Under  Mayor 
and  Governor  Pingree  an  effort  has  been  made  to  obtain  for  the 
citizens  the  lowest  possible  transportation  rate.  To  that  end  the 
railroad  is  relieved  from  all  taxation  whatever,  and  is  relieved 
from  all  care  of  the  street,  the  municipality  assuming  all  of  that 
expenditure. 


* 


3 


4 


A  second  way  is  to  secure  the  largest  return  to  the  muni¬ 
cipality  which  is  possible,  and  to  relieve  the  taxpayers,  as  far  as 
possible,  from  taxation.  That  has  not  been  the  policy  in  any  of 
the  cities  of  the  United  States,  but  in  a  certain  form  it  has  been 
attempted  abroad. 

A  third  plan  is  to  get  a  substantial  amount  of  taxes  to  the 
city  or  Commonwealth,  to  secure  considerable  assistance  in  the 
repair  and  maintenance  of  the  streets,  to  encourage  exten¬ 
sion  of  lines  and  to  get  the  best  possible  service  for  the  people 
at  a  restricted  fare.  This  last  has  been  the  Massachusetts  plan. 
It  was  adopted  back  in  the  seventies,  after  very  full  consideration. 
It  has  been  carried  on,  as  I  believe  these  hearings  demonstrate,  to 
a  very  successful  issue  up  to  the  present  time.  The  plan  is  not 
to  make  the  road  promise  to  give  the  best  service,  because  you 
cannot  rely  very  much  upon  promises — I  am  not  doing  any  dis¬ 
courtesy  to  the  rail  ways  to  say  that — but  to  make  their  selfish 
interest  work  along  the  line  of  improved  and  extended  service. 
We  have  in  this  State  taxation  commensurate  with  the  taxation 
of  other  corporations.  In  addition  thereto  the  care  of  the 
paving  of  a  large  portion  of  the  streets  is  placed  upon  the 
railways,  and  then  it  is  provided  that  when  dividends  are  earned 
above  a  certain  per  cent,  fares  may  be  reduced  by  the  Railroad 
Commissioners.  This  applies  to  all  railways  in  the  state.  But 
in  the  case  of  the  West  End  road,  which  I  represent,  there  is  an 
added  provision  in  its  charter,  that  the  rates  of  fare  shall  never 
exceed  the  rates  existing  at  the  time  the  charter  was  granted. 
This  is  the  Massachusetts  scheme.  It  produces  a  large  amount 
of  taxes  for  the  cities  and  the  state.  It  materially  reduces  the 
burden  of  caring  for  the  streets.  It  secures  reasonable  fares  and 
makes  it  to  the  interest  of  the  railways  to  employ  available 
earnings  in  improved  service  and  in  extension  of  lines  as  the 
public  demands  them. 

I  think  you  will  agree  with  me  at  the  outset  that  a  system 
which  has  been  in  operation  for  twenty  years  ought  not  to  be 
changed  in  any  radical  way  until  there  is  a  consensus  of  public 
opinion  demanding  that  change.  The  close  of  this  century 
brings  a  ferment  of  opinion  and  discussion  upon  certain  ques¬ 
tions,  the  rights  of  the  people,  their  relations  to  combined  cap¬ 
ital,  the  danger  of  too  much  combination,  the  assumption  by  the 
state  of  industrial  enterprises  and  of  transportation,  and  the 


5 


question  whether  individual  and  combined  effort  are  better 
than  collectivism.  This  discussion  is  well  enough.  Good 
often  results  from  things  fully  considered  even  if  rejected.  But 
until  this  ferment  and  discussion  reaches  some  definite  result  and 
some  fixed  plan,  I  think  you  will  agree  with  me  that 
no  radical  changes  ought  to  be  made.  No  such  definite  result  or 
fixed  plan  has  yet  been  arrived  at  in  street  railway  matters  by 
the  reformers.  Take  the  present  year.  You  are  deluged  with 
bills  which  look  in  all  directions,  not  according  to  one  line  or 
another  line,  but  in  all  directions  at  once, — to  the  lowest  possi¬ 
ble  fares  without  the  slightest  abatement  of  the  burdens  of  the 
railways,  to  the  largest  possible  return  to  the  municipality, 
going  to  the  extreme  of  municipal  assumption  of  the  roads 
themselves;  and  third,  to  regulating,  controlling  and  directing 
the  management  and  even  the  details  of  operation. 

The  proposition  before  us  today  is  to  separate  railways  from 
other  corporations,  and  to  appropriate  a  part  of  their  earnings. 
It  is  conceded  that  the  proposition  is  novel  as  contained  in  each 
one  of  the  bills  before  you.  The  bills  propose  to  tax  street  rail¬ 
ways,  just  as  other  corporations  are  taxed,  to  continue  the  burden 
of  caring  for  part  of  the  streets,  and  in  addition  to  separate 
them  from  all  other  corporations,  and  to  impose  upon  them  a 
rental,  as  one  man  calls  it,  a  tax  as  another  man  calls  it,  for  the 
use  of  the  streets. 

Street  Railways  Impose  no  Additional  Servitude  upon 
the  Streets* 

The  grounds  upon  which  this  radical  and  novel  change  is  asked 
I  for  are  practically  three.  In  the  first  place,  the  petitioners 

say  that  the  use  of  the  streets  by  street  railways  is  an  additional 
servitude  upon  the  streets  for  which  the  road  ought  to  make 
compensation.  In  the  second  place,  they  say  that  the  munici¬ 
pality  provides  the  roadbed  of  the  street  railways  and  gives  a 
valuable  something  to  the  street  railways,  for  which  compensa¬ 
tion  ought  to  be  made.  And  in  the  third  place,  they  say  that  the 
street  railways  make  absolutely  no  compensation  for  the  franchise 
which  the  State  has  granted  to  them,  and  ought  to  do  so.  I  beg 
to  say,  gentlemen,  at  the  outset,  that  I  think  every  one  of  these 
propositions  is  false,  that  the  whole  basis  of  this  agitation  is 
weak  and  rests  upon  sand. 


6 


Take  the  first.  Mr.  Quirk  began  this  hearing  and  based  his 
bill  upon  the  ground  that  the  street  railway  imposes  an  ad¬ 
ditional  servitude  upon  the  street.  To  the  lawyers  of  your 
committee,  that  argument  requires  no  answer  whatever ;  it 
is  fallacious  according  to  all  decisions  ;  and  my  reply  will  there¬ 
fore  be  of  the  briefest  possible  character.  If  it  was  an 
additional  servitude  upon  the  streets,  no  street  railway  could 
exist  for  one  instant  in  this  Commonwealth.  When  the  streets 
of  the  Commonwealth  were  laid  out  as  highways,  the  law 
conceives  that  they  were  dedicated  to  the  uses  of  the  public. 
Of  course  originally  no  one  thought  of  a  dedication,  except  for 
travel,  on  foot  or  on  horseback  and  in  vehicles,  for  those  were 
the  ways  in  which  the  highways  were  used.  But  as  the  require¬ 
ments  of  the  community  became  more  complicated,  other  things 
were  found  for  which  the  streets  ought  to  be  used,  sewers,  for 
example,  and  the  question  arose  whether  sewers  were  an  addi¬ 
tional  servitude.  The  question  would  arise  in  this  way.  The 
owners  of  the  land  abutting  upon  the  streets  often  own  the  land 
under  the  streets,  subject  to  the  purposes  of  the  dedication.  If 
a  sewer  was  a  new  servitude,  then  the  owner  of  the  street  was 
entitled  to  additional  compensation  from  some  one,  because  his 
land  had  never  been  dedicated  to  any  such  purpose  as  that.  But 
the  courts  held  that  sewers  were  within  the  public  requirement 
and  a  part  of  the  original  dedication.  The  same  was  true  of  water 
pipes,  gas  pipes  and  the  like.  The  question  of  street  railways  was 
of  the  same  character.  Was  it  a  new  or  an  old  use  ?  It  was  found, 
especially  in  crowded  localities,  that  the  use  by  vehicles  alone 
did  not  serve  the  public.  A  very  large  proportion  of  the  citizens 
had  no  carriages.  If  all  the  citizens  rode  in  carriages,  there 
were  no  streets  in  the  cities  which  were  ample  enough  to  accom¬ 
modate  them.  And  so  public  convenience  and  necessity  was 
adjudged  to  require  the  laying  of  rails  and  the  running  of  large 
vehicles  upon  them  which  could  be  utilized  by  the  public.  Such 
use  therefore  was  not  an  additional  servitude,  but  within  the 
original  dedication  and  akin  to  the  driving  over  the  street  by  the 
man  who  had  his  team.  That  question  has  arisen  in  this  State 
and  has  been  settled. 

Attorney  General  vs.  Metropolitan  Railroad,  125  Mass.,  515. 
The  question  has  arisen  in  other  States  whether  the  running 
of  steam  railroads  over  public  highways  was  an  additional  ser- 


7 


vitude,  and  there  the  courts  have  decided  that  it  was,  the  line 
being  drawn  between  local  street  railway  service  and  long-distance 
service,  and  between  the  two  methods  of  propulsion.  To  show 
the  extent  to  which  the  doctrine  of  dedication  has  been  carried, 
I  will  cite  a  case  which  arose  concerning  the  Metropolitan  sewer. 
This  sewer  was  in  no  sense  a  local  use,  or  within  the  require¬ 
ments  of  a  small  town,  especially  such  a  town  as  Winthrop, 
where  the  great  trunk  line  of  sewer  came  to  be  emptied  into  the 
sea.  It  was  no  part  of  the  sewerage  system  of  Winthrop.  And 
the  owners  contended,  in  the  case  of  Taft  against  the  Common¬ 
wealth,  that  a  great  underground  tunnel  in  the  public  streets  for 
the  service  of  twenty-one  cities  and  towns  was  not  within  the 
original  dedication.  But  the  court  held  otherwise,  even  in  that 
case,  and  held  that  the  great  tunnels  of  the  metropolitan  sewer¬ 
age  system  were  within  the  original  grant  by  the  owner  to  the 
public. 

Mr.  Harding.  What  is  the  citation?  It  is  quite  recent? 

Mr.  Elder.  Very  recent.  It  was  the  case  of  the  old  gentle¬ 
man  Taft  of  Taft’s  hotel  at  Point  Shirley.  Lincoln  Ex’tor  vs. 
Commonwealth,  164  Mass.,  1. 

So  much,  then,  for  the  claim,  which  is  absolutely  unfounded 
that  street  railways  impose  any  additional  servitude  upon  the 
streets.  It  is  because  human  beings,  citizens,  sit  in  the  cars  and 
ride  in  them  that  railways  are  allowed  to  run,  not  by  virtue  of 
special  grants  to  railways.  And  this  exact  question  has  been 
recently  so  decided  after  the  fullest  discussion  by  the  Supreme 
Court  of  Massachusetts. 

Howe  vs.  West  End  Street  Railway,  167  Mass.,  46. 

Locations  in  the  Public  Streets  are  for  the  Benefit  of  the  Public 
and  not  the  Railways. 

In  the  second  place,  it  is  contended  that  the  companies  get 
something  valuable  in  the  nature  of  a  road-bed  by  the  use  of  the 
streets  for  which  they  ought  to  pay.  Now,  that  has  been  suffi¬ 
ciently  answered  from  a  technical  point  of  view  in  what  I  have 
just  said.  But  look  at  it  from  a  practical  point  of  view.  Do 
you  believe  the  street  railways  run  through  our  public  streets 
because  they  want  to?  They  do  not.  They  run  through  our 
public  streets  because  they  have  to. 


8 


Mr.  Waterman.  Necessity  creates  the  law  of  action,  doesn’t 
it? 

Mr.  Elder.  That  is  it,  precisely.  It  is  because  the  public 
want  to  be  carried  to  store  doors,  to  street  corners  and  houses 
that  the  railways  are  allowed  and  compelled  to  run  in  the  pub- 
lie  streets.  Without  going  into  it  in  detail,  as  I  mean  to  a  little 
later,  just  stop  and  consider.  Your  steam  roads  all  through  the 
Commonwealth  today  are  separating  their  roadbeds  in  every 
conceivable  way  from  the  public  use.  They  are  separating  the 
grades  so  that  other  .travel  shall  go  above  them  or  go  under 
them.  They  are  putting  up  gates  and  barricades  everywhere  to 
prevent  their  location  from  being  the  roadway  of  the  public. 
Why?  Simply  because  it  is  too  expensive  for  them  to  risk  the 
public  upon  their  lines  of  road,  because  concurrent  use  by  the 
public  is  inconvenient  and  expensive.  Take  the  case  of  the 
street  railways,  the  paving  alone  required  for  use  of  the  streets 
as  a  roadbed  costs  $ 6,500  a  mile. 

Mr.  Waterman.  Does  that  include  the  18-inches  outside? 

Mr.  Elder.  That  includes  the  18  inches  outside — $6,500  a 
mile,  and  in  many  sections  as  high  as  $7,000  a  mile,  to  get  the 
use  of  this  roadbed  which  the  petitioners  say  is  gratuitous.  If 
the  railways  owned  their  own  roadbed,  as  steam  roads  do,  they 
would  not  be  compelled  to  spend  any  part  of  it.  Then  the 
tracks  require  to  be  made  much  more  expensively  than  those  of 
any  steam  road  in  the  Commonwealth.  The  railways  use 
heavier  steel  rails  than  any  steam  road  in  the  Commonwealth, 
and  the  expense  for  curves  and  switches  is  almost  prohibitive. 
Why?  Because  the  public  and  the  teams  drive  over  and  use  the 
track.  You  watch  a  teamster  in  any  of  our  cities,  .and  you  will 
find  that  the  instant  he  gets  a  chance,  over  he  goes  onto  the  rails 
of  the  street  railway,  and  his  big  dray  or  van  goes  pounding  along 
on  the  rails  and  over  the  expensive  switches  and  curves,  dam¬ 
aging  them  and  necessitating  repairs  to  an  extent  which  would 
not  exist  in  the  slightest  degree  if  a  roadbed  by  itself  could  be 
had.  Then,  too,  the  concurrent  use  by  the  public  of  the  roadbed 
results  in  multitudes  of  suits  for  personal  injuries,  which  cost 
the  railways  hundreds  of  thousands  of  dollars  a  year,  which 
would  not  arise  if  the  public  did  not  compel  the  railways  and 
the  nature  of  the  service  did  not  compel  them  to  conduct  their 
business  in  the  streets. 


9 


Street  Railways  already  pay  Taxes  upon  every  dollar  of 
Value  Resulting  from  the  Use  of  Streets. 

Coming,  now,  to  the  third  proposition.  We  are  told  con¬ 
stantly  in  these  hearings  that  the  railways  of  this  Common¬ 
wealth  do  not  pay  anything  for  their  franchise.  Don’t  they, 
gentlemen?  When  gentlemen  come  before  your  committee  and 
attempt  to  instruct  you ;  when  promoters  and  proposers  of  bills 
tell  you  that  the  street  railways  do  not  pay  anything  for  their 
franchise,  they  tell  you  simply  arrant  nonsense.  The  railways 
pay  taxes  upon  every  penny  of  their  franchise  in  the  most 
cleverly  devised  way  which  the  skill  of  Massachusetts  has  been 
able  to  invent. 

In  the  first  place,  to  consider  the  legal  aspect  of  the  claim, 
compensation  for  a  franchise,  as  every  law  writer  says  and 
every  judge  says,  is  paid  by  the  exercise  of  the  franchise. 
The  public  gets  its  compensation  for  the  granting  of  the  fran¬ 
chise  in  the  fact  that  the  railway  exercises  the  franchise.  The 
people  require  to  be  carried,  not  in  their  own  carriages  at  great 
expense,  but  at  a  five-cent  rate  between  the  various  sections  of  a 
city,  and  they  are  willing  to  give  the  right  to  railways  to  lay 
tracks  and  run  cars  to  accomplish  that  object  The  minute  the 
railway  lays  its  tracks  and  sets  its  rolling  stock  in  operation, 
the  public  gets  cheap  conveyance,  and  it  gets  its  compensation 
for  the  use  of  the  streets.  It  is  true  upon  every  statement  by 
every  judge  and  every  law  writer.  Judge  Gray,  in  the  case  of 
Metropolitan  Railroad  Co.  vs.  Quincy  Railroad  Co.,  12  Allen, 
269,  said  : 

“The  charter  of  a  street  railway  corporation  is  the  grant  of  a 
franchise  to  lay  iron  rails  on  part  of  the  public  highways,  to  run 
horses  and  cars  thereon  for  the  transportation  of  passengers, 
and  to  receive  fares  for  such  transportation,  in  consideration  of 
the  benefit  to  the  public  resulting  from  the  establishment  of 
such  means  of  travel,  and  in  compensation  for  the  expenses  in¬ 
curred  by  the  grantees  in  laying  their  rails  and  ruuning  their 
cars.  ” 

You  cannot  revoke  a  franchise  while  it  is  exercised  in  that 
way.  When  a  street  railway  or  a  steam  railroad  ceases  to  oper¬ 
ate  under  its  franchise  and  the  public  loses  the  benefit  it  ought 
to  have  gained,  then  the  franchise  can  be  revoked.  The  public 


10 


has  a  right  to  take  back  to  itself  the  thing  that  it  gave,  because 
it  is  not  getting  the  thing  which  it  bargained  for.  The  law  has 
been  stated  in  another  way,  namely,  that  the  expenditure  by 
the  street  railway  of  its  money  completes  the  contract  between 
itself  and  the  Commonwealth.  Up  to  the  time  it  spends  its 
money,  there  is  no  completed  arrangement.  To  expend  its 
monpy  is  to  comply  with  the  condition  imposed  in  the  grant, 
and  then  the  contract  goes  into  effect. 

But  beyond  that,  is  there  not  also  direct  compensation  for  the 
franchise?  The  railway  is  taxed  as  other  corporations  are,  upon 
its  real  estate.  It  is  not  taxed  directly  upon  its  rails  in  the 
streets.  But  the  Commissioner  of  Corporations  ascertains  the 
market  value  of  its  stock,  takes  the  number  of  shares  and  mul¬ 
tiplies  it  by  the  market  value  of  each  share,  and  thus  gets  the 
total  market  value  of  the  road.  From  this  he  subtracts  the 
amount  paid  for  local  taxes,  and  then  he  taxes  the  street  railway 
company  upon  the  difference  at  the  average  rate  of  taxation 
throughout  the  State. 

Mk.  Waterman.  Is  that  the  way  they  get  at  the  State  tax  ? 

Mr.  Elder.  That  is  the  way  they  get  at  the  State  tax.  In 
other  words,  if  the  fact  that  the  railroad  is  running  in  a  street 
without  buying  the  street,  adds  anything  to  the  value  of  the  cor¬ 
poration  itself,  the  value  of  its  stock  is  enhanced  corresponding¬ 
ly.  If  the  use  of  the  street  increases  the  value  of  its  plant  or  its 
earning  capacity,  that  shows  in  the  stock  market  in  the  price  at 
which  the  stock  will  sell,  upon  the  commonest  rules  of  human 
selfishness.  The  instant  that  value  is  added  to  the  stock,  the 
Commissioner  of  Corporations  seizes  upon  it  and  gets  this  tax 
out  of  it.  No  better  system  has  ever  been  devised  anywhere  in 
the  world  for  getting  at  the  value  of  franchises.  And  it  is 
operative  with  street  railways  as  with  all  other  corporations. 
This  system  results  in  a  large  tax.  If  the  West  End  Street 
Railway  Co.,  mostly  located  in  the  city  of  Boston,  was  taxed  on 
its  franchise  here,  it  would  pay  a  tax  about  $12.50  per  thousand  ; 
but  being  taxed  by  the  State  at  the  average  tax  rate  throughout 
the  State,  it  pays  about  $15  on  the  thousand.  So  that  $2.50 
per  thousand  is  annually  added  to  the  franchise  tax  of  the  road 
which  I  represent. 

To  refer  to  the  figures  for  an  instant,  although  I  shall  call 
them  up  again,  how  many  of  these  petitioners  knew  what  the 


11 


West  End  Street  Railway  pays  in  taxes  in  a  year  ?  Were  we 
not  all  surprised  when  we  found  that  the  taxes  paid  by  this  rail¬ 
way,  said  to  be  practically  nothing,  amounted  to  $343,897.50 
last  year  ?  We  have  been  told  a  great  deal  about  Ohio  and  what 
the  law  has  done  in  the  city  of  Cleveland.  The  city  of  Cleveland 
is  one-half  the  size  of  Boston  ;  and  the  street  railways  of  that 
city  paid  in  ten  years  up  to  1896,  the  sum  of  $347,280  to  the 
public  treasury  ;  only  $4,000  more  than  the  West  End  Railway 
paid  in  a  single  year.  So  much,  then,  for  the  third  argument 
which  it  seems  to  me  is  answered,  first  as  a  matter  of  law,  and 
second  is  answered  as  a  matter  of  fact  and  in  dollars  and  cents. 

Now,  gentlemen,  we  are  met  here  as  we  were  at  the  hearing 
last  Thursday,  by  the  claim  that  the  elevated  railroad,  in  the 
charter  that  it  asks  for,  offers  to  pay  this  very  tax  that  we 
are  objecting  to  paying.  Does  it  ?  Section  8  of  that  proposed 
bill  is  as  follows  : 

“If  the  annual  dividend  paid  is  four  per  centum  or  less  ”  (that 
ife,  on  the  stock  of  this  elevated  railroad)  “  the  sum  payable  that 
year  shall  be  a  sum  equal  to  one-half  per  centum  of  the  gross 
earnings  of  all  the  lines  of  elevated  or  surface  railroads,  owned, 
leased  or  operated  by  said  corporation.” 

That  is,  if  no  more  than  four  per  cent,  dividend  is  paid,  then 
the  franchise  tax  is  to  be  one-half  of  one  per  cent. 

“  If  said  dividend  is  more  than  four  per  centum,  and  does  not 
exceed  six  per  centum,  then  a  sum  equal  to  one  per  centum  of 
the  gross  earnings  ;  if  said  dividend  exceeds  six  per  centum, 
then  a  sum  equal  to  the  excess  of  the  dividends  over  six  per 
centum  in  addition  to  one  per  centum  of  the  gross  earnings.” 

You  see  that  not  until  the  dividends  are  over  six  per  cent, 
does  the  Commonwealth  get  more  than  one  per  cent,  of  the  gross 
earnings.  Mr.  Harding’s  bill  proposes  three  per  cent,  if  the 
Company  earns  a  dividend  of  five  per  cent.  I  have  already 
called  attention  to  what  is  granted  by  the  State  in  the 
elevated  railway  bill,  if  passed,  as  a  consideration  for  this  one 
per  cent. — 30  years’  tenure  of  its  franchise,  free  from  interfer¬ 
ence  with  fares  and’from  change  of  burdens.  If  it  were  proposed 
to  the  West  End  road  to  grant  such  things  as  those,  as  a  com¬ 
pensation  for  increased  returns  to  the  municipality,  then  we 
should  certainly  be  desirous  of  being  heard  upon  it  and  of  con¬ 
sulting  our  clients  as  to  their  willingness  to  accept.  But  no 


12 


such  proposition  is  before  us  now.  I  am  dealing,  as  you  are 
dealing  with  this  question  just  as  it  is  presented  by  the  four 
bills  which  are  before  you.  If  different  bills  or  amended  bills 
are  to  be  considered  at  any  time  by  the  committee,  we  crave 
leave  to  be  heard  upon  them. 

House  Bill  49, 

And  that  brings  us,  if  you  please,  to  the  bills  which  are  before 
you  to-day.  Mr.  Quirk’s  bill  House  49,  is  short  and  sweet.  If 
a  great  change  in  the  policy  of  the  State  in  dealing  with  cor¬ 
porations  was  ever  compressed  into  small  compass,  it  is  in  this 
bill: 

“  Section  1.  Any  corporation  occupying  any  part  of  a  public 
street  in  the  city  of  Boston  shall  pay  to  the  city  therefor  such 
pecuniary  or  other  compensation  as  the  Board  of  Aldermen, 
with  the  approval  of  the  Mayor  of  said  city  may  prescribe. 

“  Sect.  2.  This  act  shall  take  effect  upon  its  passage.” 

Thus,  gentlemen,  it  is  supposed  that  the  street  railway  prob¬ 
lem  in  its  relation  to  the  municipality  has  been  solved.  I  don’t 
know  that  I  need  to  address  myself  seriously  to  that  bill.  Will 
you  expose  the  street  railways  of  this  Commonwealth  to  the 
caprice  or,  I  should  say,  to  the  judicial  judgment  of  Boards  of 
Aldermen?  Will  you  allow  those  honorable  bodies  to  determine 
whether  a  pecuniary  compensation  or  “  other  compensation  ” 
shall  be  exacted?  We  are  told  that  some  words  are  as  broad  as 
the  mantle  of  charity.  But  no  mantle  of  charity  will  ever  be 
broad  enough  to  cover  procedure  under  the  words  “  other  com¬ 
pensation.”  One  of  the  witnesses  who  appeared  here  said  that 
one  great  object  of  this  movement  was  to  secure  to  the  railroads 
tenure  in  the  streets  and  to  prevent  railways  from  being  black¬ 
mailed.  I  should  be  the  last  person  to  suggest  that  any  board  of 
Aldermen  in  the  Commonwealth  of  Massachusetts  would  be 
guilty  of  blackmailing  any  street  railway  within  their  limits. 
And  I  hope  that  no  gentleman  will  say  to  me,  as  the  monarch  of 
the  seas  says  to  the  captain  in  Pinafore,  “  Captain,  I  would  be 
the  last  man  to  insult  a  British  sailor,”  “  Admiral,  You  are  the 
last  man  who  did  insult  a  British  sailor.” 

This  bill  is  objectionable,  because,  in  the  first  place,  it  is 
unconstitutional.  If  justifiable  at  all,  a  bill  of  this  kind  is 


13 


a  tax  ;  but  it  does  not  provide  that  any  authorized  Board  of  As¬ 
sessors,  acting  under  oath,  is  to  assess  the  tax.  It  leaves  the  assess¬ 
ment  without  the  slightest  suggestion  whatsoever  as  to  the  basis 
or  method  on  which  the  tax  is  to  be  levied.  The  whim  or  caprice 
or  sound  judgment  of  the  Board  of  Aldermen,  assisted  by  the 
Mayor  is  the  sole  test.  It  fixes  a  tax  upon  corporations  in  one 
city  and  upon  no  others.  I  doubt  very  much,  gentlemen,  if  that 
bill  was  proposed  with  seriousness.  Mr.  Quirk  alone  presents  it, 
and  it  is  not  supported  by  the  testimony  of  any  witness  what¬ 
ever.  When  Judge  Carpenter  of  New  Hampshire  was  first  ap¬ 
pointed  to  the  Supreme  bench  for  that  State,  he  held  a  term 
down  at  Dover,  and  a  prominent  lawyer  came  before  him,  and  pro¬ 
ceeded  on  an  interlocutory  matter  to  argue  with  great  vehemence 
a  radically  wrong  proposition.  Judge  Carpenter  was  not  then 
known  in  that  section,  having  practiced  in  the  northern  section 
of  the  State.  He  finally  said  to  the  lawyer,  “  There  is  prob¬ 
ably  no  man  in  the  State  of  New  Hampshire  who  knows  better 
than  you  do  that  that  is  not  the  law.”  “Oh,  yes,”  was  the 
reply,  “  that  is  so  ;  but  I  could  not  tell  what  view  your  Honor 
might  take  of  it.”  Mr.  Quirk  seems  to  be  trying  this  bill  on 
this  committee  in  very  much  the  same  way. 

House  Bill  J64. 

We  come  next  to  Mr.  Hoag’s  bill,  House  194 : 

“Any  city  of  thirty  thousand  or  more  inhabitants  shall,  and  any 
city  or  town  of  less  than  thirty  thousand  inhabitants  may,  either 
by  way  of  rental  or  direct  taxation,  assess  and  collect  such 
pecuniary  or  other  compensation  from  any  corporation,  private 
company  or  individual  now  occupying  or  making  permanent  use 
of  any  part  of  a  public  street,  highway  or  parkway,  by  virtue  of 
any  grant  or  franchise  within  the  boundary  of  said  city  or  town, 
as  the  Board  of  Aldermen  in  said  city,  or  the  Selectmen  of  said 
town,  may  determine.” 

That  bill  is  open  to  all  the  objections  which  have  been  sug¬ 
gested  to  the  other  bill.  It  is,  in  addition  to  them  open  to  the 
further  objection  that  it  proposes  as  many  systems  of  taxation 
as  there  are  cities  and  towns  in  the  state,  and  makes  possible  as 
many  systems  in  each  place  as  there  are  corporations  using  the 
streets  in  each  place. 


14 


Mr.  Hoag  evidently  felt  the  difficulty  of  his  position  in  draft¬ 
ing  this  bill.  Upon  what  ground  can  you  place  this  imposi¬ 
tion  ?  His  bill  suggests  “  rental  or  direct  taxation.”  But  we 
all  know  that  rental  comes  from  contract.  The  owner  of  premi¬ 
ses  contracts  with  his  lessee  for  the  payment  of  rent.  This 
is  not  a  contract,  and  it  cannot  rest  upon  any  contractural  rela¬ 
tion.  One  of  the  parties  is  to  have  no  voice  in  the  amount  to 
be  paid.  So  he  puts  in - 

Mr.  Waterman.  Do  you  tnnix  that  a  franchise  is  a  qualified 
gift  ? 

Mr.  Elder.  A  franchise  is  a  gift  liable  to  revocation  if  it  is 
disused,  yes  ;  in  that  sense  it  is  qualified. 

So  he  puts  in  the  phrase  “or  direct  taxation.”  The  bill  is 
open  to  the  same  objection  as  to  unconstitutionality  that  the 
other  one  is  and  more.  It  provides  that  cities  of  30,000 
inhabitants  shall  impose  this  tax,  and  cities  and  towns  of 
less  may  impose  it.  This  does  not  call  for  proportional  taxa¬ 
tion,  but  the  constitution  does.  It  places  the  taxing  power  in 
local  boards,  but  the  constitution  places  it  in  the  Legislature. 
How  long  would  such  a  law  stand  before  our  courts  ?  Not  for  a 
single  instant.  Why,  in  the  nature  of  things  or  on  principle, 
can  there  be  any  difference  in  taxation  between  a  city  of  30,000 
and  a  city  of  less.  Mr.  Hoag  is  the  only  one  who  comes  before 
this  committee  for  the  purpose  of  advocating  his  bill. 

House  Bill  734. 

Now,  we  come  to  what  I  may  be  pardoned  for  calling  an  or¬ 
phaned  bill,  that  of  Mr.  Bradley,  House  734. 

“  Section  1.  Every  street  railway  company  which  runs  any 
cars  within  the  limits  of  any  city  or  town  in  this  Common¬ 
wealth,  whether  its  routes  are  partly  or  wholly  within  said  city 
or  town,  shall  annually,  on  the  first  day  of  November,  pay  into 
the  city  or  town  treasury  the  sum  of  fifty  dollars  for  each  car 
run  by  said  company  within  the  limits  of  said  city  or  town.” 

If  it  fails  to  do  so,  it  shall  pay  interest  on  the  amount,  and 
the  officers  of  the  company  are  charged  with  the  duty  of  execu¬ 
ting  the  law.  Apart  from  the  things  said  with  regard  to  the 
other  bills,  let  us  look  at  the  practical  operation  of  that  bill. 
In  the  first  place,  do  you  suppose  that  in  Boston,  or  anywhere 


15 


in  this  Commonwealth,  you  will  have  one  set  of  cars  for 
winter  use,  and  another  set  of  cars  for  summer  use,  if  the 
roads  must  pay  fifty  dollars  apiece  for  every  car  that  they  run  ? 
Unquestionably  not.  When  a  road  is  to  be  mulcted  in  taxes  for 
giving  additional  accommodations  to  the  public,  the  natural  re¬ 
prisal  is  to  make  the  public  ride  in  one  kind  of  car  the  year 
round,  as  they  do  in  Detroit,  so  that  the  tax  may  be  paid  on  the 
smallest  possible  number  of  cars,  instead  of  on  the  largest. 
Again,  the  bill  provides  that  the  road  shall  pay  to  any  city  or  town 
in  the  Commonwealth,  whether  its  routes  are  partly  or  wholly 
within  said  city  or  town,  a  certain  amount  of  money,  fifty  dol¬ 
lars  a  car.  What  would  be  the  result  of  that,  in  the  case  of  the 
West  End  road,  for  instance  ?  Here  are  fifteen  cities  and  towns 
served  by  the  West  End  road.  On  some  of  its  lines  it  runs  the 
same  car  through  five  or  six  cities  and  towns,  and  it  is  compelled, 
or  it  may  be,  to  pay  fifty  dollars  to  each  of  those  cities  $ind 
towns  upon  one  car.  Well,  the  upshot  of  that  is  simply  this  : 
the  bill  would  drive  the  West  End  road  to  run  its  cars  to 
the  boundary  line  and  stop  and  make  the  passengers  all  get  out 
and  get  into  another  car  that  ran  through  the  next  town,  and  so 
on.  The  order  to  “  change  cars  ”  would  teach  the  public  town 
boundaries  in  most  aggravating  object  lessons.  Take  the  line 
that  Mr.  Warren  represents,  the  Lynn  &  Boston,  running 
through  the  charming  towns  and  cities  of  the  North  Shore,  and 
think  how  many  changes  a  long  suffering  public  would  make  of 
a  summer  afternoon  or  evening.  The  bill  is  well  adapted  to  rail¬ 
ways  within  a  single  municipality,  but  not  to  those  serving 
many  cities  and  towns.  Bat,  as  I  said,  gentlemen,  this  is  an  or¬ 
phaned  bill ;  even  Mr.  Bradley  does  not  come  here  to  advocate  it, 
and  I  will  take  no  further  time  upon  that. 

Associated  Board  of  Trade  Bill* 

Now  we  come  to  House  Bill  No.  445,  the  bill  of  the  Boston 
Associated  Board  of  Trade.  I  do  not  intend  to  be' guilty  of  any 
disrespect  to  that  distinguished  body  of  men,  representing  as  it 
does  various  business  organizations  in  Boston.  But  I  do  not 
think  I  shall  be  guilty  of  any  disrespect  when  I  say  to  you, 
gentlemen,  that  I  do  not  think  you  will  be  overawed  by  the 
fact  that  this  bill  comes  from  this  source.  I  ask  you,  gentlemen, 


16 


what  particular  ground  of  knowledge  the  Associated  Board  of 
Trade  of  Boston  has  which  enables  it  to  present  this  bill  before 
you  ?  Has  it,  gentlemen,  been  sitting,  as  you  have  been  sitting 
for  weeks,  now,  for  months,  hearing  all  that  is  to  be  said  in  re¬ 
gard  to  street  railways  and  their  relations  to  the  municipalities  ? 
Has  it  heard  the  evidence  ?  Has  it  heard  the  suggestions  of 
counsel  for  the  railways  ?  So  far  as  we  know,  not  in  the  slight¬ 
est  degree.  So  far  as  we  know,  not  a  single  fact  or  a  single  figure 
was  before  that  honorable  body  when  it  formulated,  or  when  some 
one  read  to  it  this  bill.  It  is  only  by  thorough  examination  and  by 
thorough  familiarity  that  it  becomes  possible  to  deal  with  any  sub¬ 
ject  intelligently.  With  the  varied  interests  imposed  upon  these 
gentlemen,  I  doubt  if  they  have  had  either  the  time  or  the  incli¬ 
nation  to  make  the  one  or  acquire  the  other.  The  responsibil¬ 
ity  does  not  rest  upon  them  as  it  does  upon  you  to  determine 
these  questions. 

Their  position  is  this  :  they  are  men  representing  large  inter¬ 
ests,  paying  large  taxes,  and  they  come  to  you  and  as  their  con¬ 
tribution  to  this  discussion  say  :  “  Reduce  the  taxes  in  Boston, 
get  something  out  of  the  street  railways  that  our  taxes  may  be 
less.”  They  do  not  stand,  as  some  other  petitioners  have,  for 
lower  fares  and  improved  service.  They  simply  say  :  “  Reduce 
our  taxes  for  us,  charge  these  railways  more  than  you  charge 
other  corporations,  and  let  it  go  to  our  benefit.” 

Let  us  consider,  gentlemen,  for  a  moment  how  carefully  this 
bill  has  been  drawn.  In  addition  to  taxes  now  provided  by  law 
it  provides  for  a  street  franchise  tax  of  three  per  cent,  on  gross 
railway  earnings.  Has  it  appeared  here,  gentlemen,  that  they 
have  had  such  familiarity  with  the  books  of  the  West  End  Com¬ 
pany  and  of  the  various  railways  through  this  State  as  to  enable 
them  to  say  that  three  per  cent,  is  the  right  figure  ?  What  single 
figure,  work  of  accountant,  auditor,  anybody,  have  they  brought 
to  you  to  show  that  three  per  cent,  is  the  right  sum  ?  Why 
shouldn’t  it  have  been  ten  ?  Why  didn’t  they  take  twenty  ? 
Why  shouldn’t  it  have  been  one  ?  Not  one  iota  of  evidence,  not 
one  fact  is  brought  to  bear  upon  this  question.  They  just  say 
three  per  cent,  that  is  all. 

But  this  bill  attempting  to  be  scientific,  because  we  certainly 
must  give  credit  to  the  bill  for  all  that  it  attempts  to  be — pro¬ 
vides  further  that  the  payment  of  this  franchise  tax  shall  not  re- 


IT 


duce  dividends  below  five  per  cent.  Why  five  per  cent.? 
I  agree  that  the  Associated  Board  of  Trade  is  capable  of  dealing 
with  a  question  of  returns  upon  capital.  Why  have  they  picked 
live  per  cent  ?  Do  they  pretend  to  tell  you,  gentlemen,  that  the 
rate  for  investments  of  this  character,  involving  risk,  is  five  per 
cent,  in  this  state  ?  You  can  get  very  good  mortgages,  which 
are  absolute  security,  at  five  per  cent,  in  this  state.  But  their 
suggestion  is  that  five  per  cent,  is  a  fair  return  on  stock  which 
stands  above  several  sets  of  mortgages  and  above  several  mil¬ 
lions  of  eight  per  cent,  preferred  stock  Do  they  mean  to  tell 
you  or  has  any  expert  testified  that  if  the  West  End  hadn’t  al¬ 
ready  invested  its  millions  of  money,  that  they  could  get  money 
to  build  the  road  on  a  basis  of  only  five  per  cent,  dividends  and 
after  that  a  division  of  profits  with  the  city  ?  Certainly  not. 
And  learned  counsel  felt  the  force  of  this  fact,  for  he  said  that 
he  would  not  quarrel  at  a  change  to  six  per  cent.  If  the 
advocate  of  the  bill  admits  that  amount  of  doubt  in  it,  it  cer¬ 
tainly  is  not  entitled  to  any  reverence,  no  mattter  what  source 
it  comes  from.  Almost  the  only  witness  who  came  to  my 
friend  Harding’s  assistance  on  this  bill  was  Mr.  Robinson,  and 
Mr.  Robinson  said  the  rate  ought  to  be  eight  per  cent.,  before 
this  tax  should  be  imposed,  showing  how  much  of  exactness 
there  is  among  the  advocates  of  the  measure.  But,  gentlemen, 
the  public  statutes  of  Massachusetts,  in  existence  when  the  West 
End  Road  was  chartered,  when  all  these  roads  were  chartered, 
fixed  ten  per  cent,  as  the  proper  return  to  railway  stockholders 
before  fares  could  be  reduced.  That  was  the  concensus  of  opinion 
in  Massachusetts  as  fixed  in  its  laws  and  retained  on  its  Statute 
Book.  Which  of  these  figures  will  you  take  ?  five,  six,  eight  or 
ten  per  cent.?  What  evidence  has  been  introduced  to  enable  you 
to  determine  that  question  in  favor  of  this  bill. 

The  Railways  Gain  Nothing  By  the  Bill  From  Permanent 

Locations* 

Both  this  bill  and  the  Governor’s  message  provide  that  when 
this  tax  is  imposed  something  shall  be  given  to  the  companies. 
The  Governor  felt  the  fairness  of  doing  so  ;  the  advocates  of  this 
bill  feel  the  fairness  of  doing  so  ;  and  the  bill  provides  that  no 
locations  in  the  public  streets  shall  be  taken  away  without  a 


18 


new  location  of  a  similar  character  being  given  and  compensa¬ 
tion  to  the  railroad  company  for  the  change.  Thus  the  com¬ 
panies  are  supposed  to  get  something  in  exchange  for  the  impo¬ 
sition  of  this  tax.  Do  they  get  anything,  gentlemen?  Nothing 
whatever.  Locations  have  not  been  revoked  anywhere,  except 
with  the  consent  of  the  railway  companies,  and  they  can’t  be. 
A  lot  of  men  go  out  along  a  new  line  of  a  street  railway  and  they 
build  houses.  Somebody  proposes  to  revoke  this  railway  loca¬ 
tion.  In  they  come,  not  for  the  railway,  but  for  themselves, 
and  say,  “  We  shall  be  stranded  out  there  where  we  have  built 
•our  houses,  you  must  not  revoke  that  location.”  They  are  sure 
to  be  heard. 

It  is  only  in  localities  from  which  no  public  pressure  can  be 
brought  to  bear  upon  Boards  of  Aldermen,  that  locations  can 
ever  be  revoked.  And  in  such  localities  there  is  no  business, 
and  the  roads  are  quite  willing  to  be  relieved  from  operating 
their  cars.  Don’t  you  believe,  gentlemen,  that  in  sparsely  settled 
districts  the  West  End  and  all  these  roads  would  be  glad  to 
have  the  authorities  revoke  their  locations?  Most  assuredly 
they  would.  If  the  West  End  could  confine  its  operations  to 
four  or  five  great  avenues,  it  would  make  double  the  money  that 
it  does  with  its  295  miles  of  track,  stretching  in  every  direction. 
There  is  no  danger  in  this  direction,  and  nothing  is  given  to  us 
by  the  bill.  But  the  provision  is  significant  because  it  shows 
that  both  His  Excellency,  the  Governor,  and  these  gentlemen 
felt  that  something  ought  to  be  secured  to  the  roads  if  this 
novel  tax  was  to  be  imposed.  If  it  preserved  the  roads  from 
constant  agitation  as  to  fares,  from  constant  dictation  as  to 
methods  of  service  and  demands  for  increased  expenditure,  it 
would  be  of  value.  But  as  it  is,  it  does  not  serve  a  single  useful 
purpose  to  the  railways. 

Hardly  Any  Two  of  the  Petitioners  Agree  on  What  Should 

Be  Done* 

Now,  then,  let  us  come  to  the  way  in  which  this  bill  was  sup¬ 
ported.  Mr.  Harding  eloquently  addressed  you  in  favor  of  his 
bill.  A  gentleman  associated  with  him  did  the  same.  Mr.  Rob¬ 
inson,  a  street  railway  man,  favored  the  bill  for  the  reason  that 
he  thought  he  could  trade  with  the  Selectmen  of  country  towns 


19 


for  locations  to  better  advantage  if  this  bill  became  a  law.  On 
the  other  hand,  Mr.  Frank  Parsons  opposes  the  bill.  He  says 
that  it  takes  away  the  right  to  revoke  locations  and  that  that  is 
a  contractual  right  existing  in  the  cities  and  towns.  He  says 
three  per  cent,  is  too  little  of  a  tax,  he  wants  more.  An  old 
Scotch  squire,  whom  Walter  Scott  tells  about,  invited  the 
*  minister  and  a  deacon  to  his  house  to  dine  and  asked  the 
preacher  to  ask  the  blessing,  which  he  did,  and  the  squire  said 
that  it  was  too  long  by  half,  and  the  old  Covenanter  said  it  was 
a  scant  allowance  of  spiritual  grace.  That  is  just  about  the  posi¬ 
tion  of  this  bill — no  one  is  pleased  with  it  except  its  author. 

Mr.  Franx  Parsons  prefers  that  lower  rates  of  fares  should  be 
sought  for  before  increased  returns  to  the  municipality.  Harry 
Lloyd,  who  appears  for  the  Labor  Union,  says  the  same.  Mr. 
Oliver  Downing  a  member  of  the  Massachusetts  Democratic  Club, 
opposes  this  bill  and  wants  municipal  ownership.  Mr.  Charles 
M.  Cox  of  the  Chamber  of  Commerce, — a  member,  you  see,  of 
this  Associated  Board  of  Trade,  says  that  this  bill  never  was 
presented  to  the  chamber  of  Commerce,  so  far  as  he  knows, 
never  was  considered  by  it,  and  he  opposes  it  because  he  wants 
municipal  assumption  of  the  roads.  Mr.  Utley  of  Brookline, 
who  sought  to  be  careful  and  conservative  in  his  remarks,  said 
the  whole  subject  was  a  very  difficult  one  to  deal  with,  and  that 
it  seemed  to  him  on  the  whole  if  something  was  to  be  done 
with  street  railways  it  ought  to  be  done  in  the  direction  of  lower 
fares  rather  than  of  increased  returns  to  the  municipality.  And 
then  we  had  down  here  the  quarrel  from  Holyoke,  the  handsome 
looking  member  of  the  Board  of  Aldermen  and  the  old  gentleman 
representing  the  street  railways.  The  latter  thought  if  he  could 
>  '  get  a  little  something,  he  didn’t  care  much  what  it  was,  to  pre¬ 

vent  the  Holyoke  Board  of  Aldermen  from  attacking  him  any 
more,  he  should  be  glad  of  it.  That  is  the  state  of  the  evidence 
with  regard  to  this  case.  I  think  you  will  agree  with  me  that 
before  the  policy  of  the  State  of  Massachusetts,  continued  for 
upwards  of  twenty  years,  shall  be  radically  changed  in  its  deal¬ 
ing  with  corporations  and  street  railway  companies,  there  must 
be  something  more  than  this.  There  must  be  some  well  set¬ 
tled  and  generally  accepted  plan.  There  is  absolutely  nothing 
of  the  kind.  One  man  wants  lower  fares.  Another  free  transfers. 
Another  increased  taxes.  Another  wants  the  city  to  take  up  the 


20 


whole  railway  system,  another  wants  to  have  you  put  the  wires 
underground.  Another  wants  to  direct  the  management  of  the 
road  and  the  prices  paid  for  labor.  Until  there  is  something 
definite,  radical  changes,  as  I  have  suggested,  ought  not  to  be 
undertaken. 

Street  Railway  Stock  is  Sold  above  par  under  Exist¬ 
ing  Laws* 

There  are  some  difficulties  in  the  way  of  this  legislation,  one 
which  was  pointed  out  by  Mr.  Warren.  I  don’t  know  how  it  is 
to  be  dealt  with.  No  way  has  been  suggested  even  by  the  emi¬ 
nent  counsel  representing  the  Board  of  Trade.  Everybody 
agrees  I  think,  that  some  dividend  ought  to  be  paid  on  street 
railway  stock.  The  companies  have  done  a  great  deal  for  the 
public.  Some  dividend  ought  to  be  paid  before  any  further  tax 
is  collected  by  the  state  or  city.  But  how  are  you  going  to 
manage  this  difficulty  ?  For  the  last  few  years,  under  a  law  of 
this  state,  stock  of  street  railway  companies  is  not  sold  at  par, 
but  its  value  is  fixed  and  it  must  be  sold,  when  new  capital  is 
wanted,  at  a  rate  fixed  by  the  Board  of  Railroad  Commissioners, 
or  by  a  sale  at  auction.  In  the  case  of  the  Springfield  Rail¬ 
road  its  new  stock  was  sold  at  170,  in  the  case  of  the  Lynn  & 
Boston  at  125,  and  so  a  varying  amount  through  the  state. 
You  can  declare  dividends  only  on  the  par  of  stock,  and  where 
you  provide  for  five  per  cent.,  six  per  cent.,  eight  per  cent, 
dividends  in  this  bill  before  the  tax  is  collected  how  are  you 
going  to  deal  with  stock  for  which  170  has  been  paid  ?  Five 
per  cent,  on  stock  which  cost  100  is  very  different  from  five  per 
cent,  on  stock  which  cost  170.  There  is  absolutely  no  way.  You 
cannot  declare  one  dividend  upon  stock  sold  at  par,  and  another 
dividend  upon  stock  sold  under  law  at  170.  It  must  be  uni¬ 
form,  and  that  being  so  I  will  defy  the  most  ingenious  drafts¬ 
man  to  put  a  bill  in  form  which  shall  regulate  the  proposed 
taxation.  When  Mr.  Warren  asked  my  learned  friend,  Mr. 
Harding,  how  he  would  do  it,  Mr  Harding  said  he  would  ,l  safe¬ 
guard  ”  the  rights  of  stockholders  who  had  bought  stock  at  more 
than  par.  “  Safeguard  ”  is  a  broad  word.  But  how  he  will  put 
“  safeguard  ”  into  technical  language  I  am  at  a  loss  to  see. 

I  have  suggested  to  you,  gentlemen,  that  the  street  railway 


companies  already  pay  a  franchise  tax, — that  I  need  not  review, 
— a  tax  in  the  case  of  the  West  End  of  upwards  of  $343,000. 
How  much  is  that,  gentlemen  ? — I  won’t  say  on  their  capital. 
How  much  is  it  on  their  earning,  gentlemen  ?  It  is  over  four 
and  a  quarter  per  cent,  of  the  gross  earnings  of  this  road  that  it 
now  pays  to  the  public.  Isn’t  that  enough  ?  Mr.  Harding  said 
that  if  the  West  End  road  were  situated  in  the  City  of  New 
York  it  would  pay  $534,000  in  taxes. 

Mr.  Harding.  Four  years  ago. 

Mr.  Elder.  Four  years  ago.  Well,  now,  gentlemen,  how 
much  did  all  the  railways  in  the  State  of  New  York  pay  last 
year  ?  They  paid  $999,713.36.. 

Mr.  Harding.  Street  railways  do  you  mean  ? 

Mr.  Elder.  Street  railways,  yes  ;  $999,713.36.  They  had  a 
total  income,  as  shown  by  the  report  of  the  Railroad  Commis¬ 
sioners  of  the  State  of  New  York,  of  $25,477,227.44.  The  street 
railways  in  Massachusetts  had  a  total  income  of  $13,184,342.28 
or  about  half  that  of  the  railways  in  New  York,  and  they  paid 
$448,138.01  in  taxes  to  the  public  ;  that  is  to  say,  with  about  half 
the  income  they  paid  about  half  the  taxes  to  the  public  treasury 
that  the  New  York  Railways  did.  As  I  said  at  the'last  hearing, 
and  I  must  not  repeat  myself  because  of  taking  time,  if  the 
Boston  public  would  be  contented  with  the  kind  of  service  that  is 
given  in  the  City  of  New  York,  then  they  could  pay  taxes  and 
could  do  a  great  many  other  things  that  they  don’t  do.  But 
Boston  is  not  contented  with  those  old  horse  cars  and  kerosene 
lamps  and  straw  for  your  feet,  and  stoves  for  heating,  and  strips 
of  ingrain  carpeting  for  seats,  and  locomotion  by  worn-out  horses 
which  even  their  own  newspapers  are  constantly  caricaturing. 


Broadway  and  Ferry  Franchises. 

It  is  true,  gentlemen,  that  some  ferry  franchises  are  sold  at 
large  prices.  Ferry  franchises  are  practically  monopolies.  Peo¬ 
ple  must  get  across  at  given  points  and  can’t  at  others.  And 
you  can  sell  such  things  as  that  in  New  York. 

And  a  Broadway  franchise  can  be  sold  for  large  amounts. 
Seven  miles,  gentlemen,  of  line,  fourteen  miles  of  track,  opera¬ 
ting  by  cable  through  the  largest  and  the  thickest  settled  pop¬ 
ulation  on  this  side  of  the  water,  with  only  one  establishment 


22 


for  its  car  houses  and  power  plant  and  administration  offices  will 
pay  !  You  can  certainly  get  money  for  that  kiud  of  a  franchise. 
You  could  here  in  Boston.  If  you  were  contented  to  deal  with 
Washington  street  alone  or  Tremont  street  alone  and  let  one 
railroad  get  the  enormous  traffic,  it  could  pay  something  for  it. 
But  you  have  asked  to  have  fifteen  cities  and  towns  accommo¬ 
dated  by  a  large  line,  much  of  which  does  not  pay,  and  for  that 
franchise,  I  submit,  gentlemen,  there  cannot  be  compensation. 

Besides  Taxes  Our  Street  Railways  Take  Care  of  Part  of 

Streets. 

But,  gentlemen,  that  is  not  all  that  the  West  End  road  and  the 
roads  in  this  state  are  doing.  In  horse  car  times  it  was  provided 
that  the  railways  should  take  care  of  the  paving  between  the 
rails  and  eighteen  inches  outside  of  the  rails, — why  ?  Because 
the  horses  wore  it  out  as  they  went  over  it  and  because  eighteen 
inches  outside  was  considered  a  fair  amount  for  the  wear  and  tear 
upon  the  paving  of  the  streets.  That  was  well  enough  when 
horses  were  used,  but  to-day  horses  are  not  used  while  electricity 
is.  The  railways  of  Massachusetts  to-day  don’t  wear  one  block 
of  pavement,  they  don’t  touch  it.  They  get  their  power  from 
above  and  they  simply  touch  their  own  rails.  Every  reason 
that  ever  existed  for  requiring  street  railways  to  pave  the 
streets  after  their  tracks  were  once  laid  has  ceased  to  exist.  Not 
only  to  pave  them,  gentlemen,  the  railways  must  keep  them  in 
repair.  That  means  that  if  a  sewer  in  Boston,  and  I  presume 
elsewhere,  is  ripped  up  and  the  pavement  of  a  street  railway  is 
interfered  with,  the  city  does  not  replace  it,  but  requires  that  the 
street  railway  shall  put  it  down  again,  though  the  city  ripped 
it  up  for  its  own  purposes. 

,  Rep.  Waterman.  Where  is  the  equity  of  that  ? 

Mr.  Elder.  There  is  not  the  slightest  equity  in  it.  $30,000 
was  the  cost  to  the  West  End  road  for  the  City  of  Boston’s  rip¬ 
ping  up  the  pavement  of  Atlantic  Avenue  to  lay  its  sewers,  in 
addition  to  the  interference  with  the  West  End’s  business  dur¬ 
ing  all  the  intervening  time. 

Rep.  Waterman.  Why  don’t  the  West  End  contest  that  on 
that  point  ? 

Mr.  Elder.  Because,  there  is  the  law.  Suppose,  gentlemen, 


i 


« 


I 


I 

> 

4 


« 


23 

we  were  here  asking  you  to  repeal  this  law  which  requires  the 
railways  to  keep  the  paving  in  order,  wouldn’t  we  have  a  thou¬ 
sand  times  better  case  than  these  gentlemen  have  who  attempt  to 
increase  the  burdens  upon  the  road  ?  I  submit  that  we  should. 
Why,  gentlemen,  it  costs  $6,500  a  mile  to  lay  the  pavement,  so 
that  the  West  End  road  has  upwards  of  $2,000,000  of  its  capital 
in  pavement  which  it  does  not  use.  One  funny  thing  about  it  is 
that  in  a  number  of  instances  in  which  Boston  has  torn  up  the 
paving  for  its  own  purposes  it  has  carried  off  the  paving  stones 
and  required  the  West  End  to  furnish  new  ones  in  their  place. 
We  can’t  complain.  We  can’t  fight.  We  simply  have  to  come 
here  and  attempt  to  resist  further  attacks.  Now,  gentlemen, 
how  much  does  paving  cost,  a  year  ?  In  addition  to  the  taxes  I 
have  spoken  of,  the  repair  account  of  last  year,  gentlemen,  for 
paving,  was  $133,701.79. 

Rep.  Waterman.  You  didn’t  put  that  into  your  brief  that 
you  gave  us.  Why  didn’t  you  put  it  in? 

Mr.  Elder.  The  brief  for  this  hearing  has  not  been  fur¬ 
nished,  Mr.  Waterman,  the  other  brief  was  only  upon  free  trans¬ 
fers,  and  this  we  felt  did  not  come  within  that  subject.  Track 
reconstruction,  estimated  at  $4000  a  mile,  for  twenty -five  miles 
of  reconstruction  last  year  was  $100,000.  In  addition  to  that, 
the  West  End  built  twenty  miles  of  new  track  last  year.  What  for? 
In  outlying  sections,  where  the  public  convenience  demanded  it, 
and  yet  where  no  concern  seeking  merely  returns  upon  its  capi¬ 
tal  would  have  built  it,  but  for  the  purpose — let  us  concede  the 
selfish  side  of  it — of  preventing  any  other  company  from  getting 
into  the  streets,  and  doing  what  the  public  fairly  demanded, 
twenty  miles  were  built,  making,  at  $6500  per  mile,  $130,000 
last  year. 

Rep.  Waterman.  That  all  paid? 

Mr.  Elder.  That  is  all  paid,  yes.  That  is  all  for  paving, 
not  for  tracks,  but  for  paving,  $130,000,  making  a  total  for  last 
year  of  $363,701.79  for  paving  alone.  Don’t  let  me  leave  that 
in  doubt.  For  paving  alone.  That  doubles  the  tax,  a  little  more 
than  doubles  the  tax,  and  that  too  for  paving  that  the  road 
doesn’t  use  or  wear  out. 

The  Chairman.  I  suppose,  Mr.  Elder,  that  that  is  a  scienti¬ 
fic  way  of  building  a  roadbed,  isn’t  it,  at  the  side,  apart  from 
any  wear  that  you  say  is  gone,  it  is  a  scientific  way  of  building 


24 


a  roadbed?  You  would  do  that  in  self  defence  anyway,  wouldn’t 
you,  for  the  tracks? 

Mr.  Elder.  Yes,  sir,  in  a  way  that  is  true. 

The  Chairman.  That  is,  it  is  the  most  approved  method  and 
the  cheapest  in  the  long  run,  isn’t  it,  for  your  company  to  build 
them  in  that  way? 

Mr.  Elder.  No,  not  the  cheapest  in  the  long  run.  It  would 
be  much  cheaper  to  place  rails  with  a  small  amount  of  paving 
than  it  would  to  go  to  this  expensive  construction.  But  what  I 
am  using  it  for  and  calling  attention  to  is  this:  that  the  road  it¬ 
self  does  not  use  or  wear  this  paving  at  all,  and  that  the  city  gets 
the  benefit  of  it. 

The  Chairman.  Yes. 

Mr.  Elder.  And  the  wear  upon  its  rails  is  very  much  great¬ 
er  from  the  heavy  teaming  which  follows  along  the  line  of  the 
tracks  than  it  is  even  from  the  use  by  the  cars  themselves.  In 
other  words,  we  are  paying  for  the  public  use  not  only  of  the 
paving  but  of  the  rails  themselves. 

Existing  Handicaps  Upon  Massachusetts  Roads, 

Gentlemen,  I  called  your  attention  at  the  last  hearing  to  the 
disadvantages  under  which  Massachusetts  roads  operate  their 
lines  and  asked  if  it  was  fair  to  impose  any  further  burdens  up¬ 
on  them.  But  I  want  to  recapitulate  these  disadvantages  under 
which  the  West  End  and  other  roads  operate,  illustrating  by  the 
West  End.  In  the  first  place,  higher  wages  are  paid  in  Boston 
than  almost  anywhere  else  in  the  country,  very  much  higher, 
$2.25  a  day  against  less  than  $2.00  a  day  outside,  which  is 
$450,000  a  year  more  than  is  paid  in  most  other  cities  and 
towns.  It  gets  ten  hours  a  day  service,  and  not  twelve,  as  they 
do  in  the  Western  cities,  which  makes  a  very  large  difference, 
not  easily  estimated  or  placed  in  figures.  On  account  of  the 
congestion  of  the  streets  in  the  city  of  Boston,  seventy  miles  a 
day  is  the  run  of  a  car  instead  of  one  hundred,  as  it  is  in  Phila¬ 
delphia,  and  practically  all  of  the  western  cities,  which  makes  a 
difference  of  thirty  per  cent,  in  the  amount  of  work  to  be  ob¬ 
tained  from  the  cars,  from  the  motormen  and  from  the  conduc¬ 
tors.  Operating  expenses  are  thus  increased  nearly  thirty  per 
cent.,  amounting  to  certainly  $500,000.  Coal  used  here  $3.25  a 


ton  against  $1.00  in  practically  all  the  cities  with  which  com¬ 
parisons  have  been  made  by  petitioners.  Feed  wires  required  to 
be  put  underground  by  the  Massachusetts  Legislature  recently 
cost  $400,000.  The  heating  of  cars  imposed  by  the  Massa¬ 
chusetts  Legislature,  increased  the  expense  for  power  and  the 
size  of  wires  and  conduits  at  least  twenty-five  per  cent.  And  now 
the  rental  of  the  Subway,  which  is  placed  upon  the  company  by 
the  situation  of  the  city  will  amount  to  $332,500  a  year.  The 
•question  of  adding  a  trifle  more,  gentlemen,  $240,000  a  year 
more  is  before  you  for  consideration.  It  is  a  fair  question  when 
the  back  of  the  best  servant  will  break.  I  think 

The  Chairman.  Where  did  you  get  the  last  figure  that  you 
gave? 

Mr.  Elder.  Three  per  cent. 

The  Chairman.  Figuring  on  this  bill  here,  No.  445  ? 

Mr.  Elder.  Yes.  Three  per  cent,  is  asked  for  and  the  in¬ 
come  was  $8,000,000,  which  makes  $240,000. 

It  was  somewhat  interesting  to  hear  one  “ reformer”  speak  of 
“  this  trivial  sum.”  These  gentlemen  deal  in  such  large  figures 
and  vast  interests,  that  they  speak  of  a  quarter  of  a  million  of 
dollars  in  a  way  that  no  person  who  comes  in  contact  with  the 
actual  management  of  business  affairs  ever  dares  trust  himself 
in. 

If  you  will  pardon  me,  gentlemen,  I  want  to  say  just  a  single 
word  more,  and  I  shall  not  have  to  trouble  you  again.  I  want 
before  closing  to  call  your  attention  to  what  has  been  accom¬ 
plished  by  the  Massachusetts  system,  whereby  the  companies 
are  compelled  to  do  all  that  they  can  for  the  public.  In  addi¬ 
tion  to  the  admirable  service  which  you  see  every  day,  consider 
the  way  in  which  the  street  railway  companies  and  the  West 
End  Company  have  gone  out  into  new  and  sparsely  settled  dis¬ 
tricts  and  enabled  the  public  to  get  away  from  the  crowded 
centres  into  comfortable  homes  where  rentals  and  land  values 
are  low.  We  have  had  cited  to  us  constantly  the  example  of 
foreign  cities.  Glasgow  has  been  cited  to  us  over  and  over 
again.  It  has  a  population  of  800,000,  and  has  how  much 
street  railway  service?  Sixty -six  miles  of  street  railway  in  that 
great  city  of  Glasgow,  two  or  three  trunk  lines  in  thirty-seven 
miles  of  streets.  Its  fares  we  are  told  are  marvelously  low.  Yes 
•but  its  fares  are  so  regulated  that  every  time  you  pass  a  mile 


26 


post  or  station  you  pay  a  new  fare,  the  result  being  that  the  peo¬ 
ple  are  huddled  in  the  centre  of  the  city  to  avoid  paying  re¬ 
peated  fares  to  get  into  the  suburbs. 

And  Glasgow  shows  the  result  of  that  kind  of  a  system. 
Take  the  last  census  and  you  find  that  a  large  per  cent,  of  the 
population  of  Glasgow,  amounting  to  100,000  human  beings, 
live  in  tenements  of  one  room.  You  find  that  forty-seven  per 
cent,  of  the  population  live  in  tenements  of  two  rooms,  namely, 
264,000  of  the  population.  The  density  of  population  in  Glas¬ 
gow  is  over  fifty-seven  to  the  acre,  taking  the  average  of  the 
occupied  area  of  Glasgow,  though  in  many  sections  it  is  upwards 
of  two  hundred.  In  Boston,  with  our  system  of  getting  people 
into  the  suburbs,  it  is  twelve  to  the  acre  and  no  more.  I  want 
to  read  just  a  single  word  which  comes  from  Municipal  Govern¬ 
ment  in  Great  Britain. 

“  The  proportion  of  the  two-roomed  dwellers,  on  the  other 
hand,  had  greatly  increased.,,  These  figures  are  taken  after  a 
great  improvement  had  been  wrought.  “  Thus,  in  1891,  there 
were  only  100,000  people  living  in  one  room,  while  nearly  264,- 
000  were  in  two  rooms,  this  class  of  dwellers  constituting  forty- 
seven  per  cent,  of  all  the  people  within  the  city  limits  at  the 
time  of  the  census.  A  population  thus  housed  might  well  give 
employment  to  an  army  of  sanitary  inspectors.  Small  as  these 
abodes  are,  great  numbers  of  them  took  lodgers  in  addition  to 
the  regular  family.  Dr.  Russell,  the  medical  examiner,  re¬ 
marked,  ‘  Nor  must  I  permit  you  in  noting  down  the  tame  aver¬ 
age  of  fully  three  inmates  in  each  of  these  one-apartment 
houses/  ” 

They  call  what  we  call  a  tenement  a  “  house,”  it  means  one 
room, — “to  remain  ignorant  of  the  fact  that  there  are  thous¬ 
ands  of  these  houses  which  contain  five,  six  and  seven  inmates, 
and  hundreds  which  are  inhabited  by  from  eight  to  even 
thirteen.” 

We  have  constantly  had  Berlin  called  to  our  attention.  It 
has  a  system  of  cheap  fares,  but  also  graded  in  circles,  as  I  have 
just  described,  whereby  rents  in  the  centre  of  the  city  are  kept 
at  enormous  prices  and  by  which  the  laboring  population  is  kept 
herded  together  in  the  most  unsanitary  and  immoral  way.  I 
am  reading  from  “  Municipal  Government  in  Continental  Eu¬ 
rope  ”  which  quotes  from  Herr.  R.  Bodkh,  chief  statistician.  “  In 


1885  it  was  found  that  73,000  persons  in  Berlin  were  living  in  the 
condition  of  families  occupying  a  single  room  in  tenement  houses  ; 
382,000  were  living  in  houses, — (I  mean  by  house  the  distinct 
apartment  of  a  household) — of  two  rooms  ;  432,000  occupied 
houses  of  three  rooms  and  398,000  were  quartered  in  the  luxury 
of  houses  having  at  least  four  rooms.  It  was  found  that  although 
the  one-room  dwellers  were  only  one-sixth  as  numerous  as  the 
three-room  dwellers,  their  rate  of  mortality  was  about  twenty- 
three  times  as  high  and  the  actual  number  of  deaths  among 
them  was  four  times  as  great.  Compared  with  the  dwellers  in 
houses  of  more  than  four  rooms  the  mortality  of  the  one-room 
dwellers  was  at  a  thirty  times  greater  rate.  In  a  total  popula¬ 
tion  at  that  time  of  1,315,000,  the  73,000  people  who  lived  in 
in  one  room  tenement  quarters  suffered  nearly  half  the  entire 
number  of  deaths.  Their  death  rate  per  one  thousand  for  the 
year  was  163.5  per  cent.,  or  about  one-sixth  of  the  entire  number, 
while  the  two-room  dwellers  sustained  a  death  rate  of  only 
twenty-two  and  five  one-hundredths,  the  three-room  "dwellers 
escaped  with  the  marvelously  low  rate  of  seven  and  five  one- 
hundredths,  and  the  well-to-do  people,  who  had  four  or  five 
rooms  for  their  household,  suffered  by  death  only  at  the  rate  of 
five  and  four-tenths  per  thousand  population.” 

Gentlemen,  I  believe  the  great  service  that  our  street  railways 
are  doing  in  this  country  is  not  so  much  in  the  uniform  and  low 
rate  of  fare,  and  in  the  return  made  to  the  municipality,  as  it  is 
in  its  effect  upon  the  public.  We  have  adopted  in  this  country 
the  uniform  fare,  just  as  we  have  in  our  hotels.  We  all  of  us 
prefer  to  go  to  an  hotel  and  pay  two  or  three  dollars  a  day  and 
have  whatever  there  is,  to  the  European  plan  of  paying  a  new 
price  for  everything  ordered,  even  to  a  candle  to  undress  by. 
Our  street  railway  system  has  adopted  precisely  the  same  idea. 
You  pay  five  cents  and  can  go  the  length  of  the  line.  It  is  true 
that  the  rate  is  too  high  for  the  person  riding  six  or  eight  or  ten 
blocks.  He  need  not  pay  it  unless  he  chooses.  But  the  roads 
are  enabled'  to  run  long  distances  because  of  the  short  trips  and 
uniform  fare.  And  there  is  the  enormous  benefit,  that  the  labor¬ 
ing  classes  are  not  driven  into  great  tenement  houses  and  up 
narrow  staircases,  living  and  herded  together  in  single  rooms, 
but  are  enabled  to  go  with  their  children  into  the  outskirts,  into 
the  fresh  air  and  into  ample  and  abundant  homes.  Such  service 


28 


as  this  to  the  public,  not  merely  from  a  sanitary  standpoint, 
but  also  from  the  standpoint  of  morality,  because  the  immorality 
resulting  from  the  herding  of  human  beings  cannot  be  exaggerated, 
is  an  enormous  saving  to  the  public  treasury,  in  sanitary  inspec¬ 
tion,  and  of  illness  and  epidemic  diseases. 

Hamburg’s  scourge  of  a  few  years  ago  from  cholera  was  more 
due  to  the  herding  of  the  people  under  the  Hamburg,  Berlin,  sys¬ 
tem  of  graded  fares  than  it  was  to  any  other  cause.  The  enor¬ 
mous  expenditure  of  the  city  and  the  enormous  loss  to  its  mer¬ 
cantile  interests  cannot  be  estimated.  I  say,  gentlemen,  then, 
that  considering  the  payment  of  taxes  by  these  roads,  the  return 
made  in  the  care  of  streets  and  the  infinitely  greater  service 
which  they  render  to  the  community,  there  should  be  no  change 
in  the  policy  of  the  State.  No  well  defined  plan  for  change 
exists.  The  lines  proposed  are  as  shifting  as  water  and  cohere 
as  little  as  the  sands  of  the  seashore. 


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